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IS1.4.1ÌýÌýÌýÌý Income tax

Non-resident individuals are subject to income tax on Israeli-sourced income. Sourcing rules determine when income is to be regarded as being from an Israeli source.

Employment income is treated as sourced where the related work is performed. Double tax treaty relief may be available for employment income derived by a foreign resident performing services in Israel, as such income would be subject to Israeli taxation.

Security based compensation for employees who relocate to or from Israel may be subject to Israeli taxation depending upon the specifics of the benefit plan.

Tax on dividends and interest income is discussed in IS1.3.1. For a non-resident, the general (or preferential) tax rate on dividends and interest may be reduced by an applicable tax treaty.

Interest paid to a non-resident from deposits of foreign currency with an Israel bank is exempt from tax, subject